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Wall Street and Europe reverse deeper losses as Israel retaliates against Iran

Middle East tensions hit stockmarkets

ftse A man crosses a street as motorists drive past a billboard depicting Iranian ballistic missiles in service in Tehran on April 19, 2024. Iran's state media reported explosions in the central province of Isfahan on April 19, as US media quoted officials saying Israel had carried out retaliatory strikes on its arch-rival. (Photo by AFP) (Photo by -/AFP via Getty Images)
The FTSE 100 managed to eke out gains on Friday as US officials reported Israeli retaliatory strikes on Iran. (- via Getty Images)

The FTSE 100 (^FTSE) and European stocks managed to eke out gains on Friday as US officials reported Israeli retaliatory strikes on Iran. Over on Wall Street, the US stock market opened flat as shares in streaming service Netflix (NFLX) slid 7% after it issued a mixed trading outlook last night.

Traders have been cautiously watching Israel’s reaction to Iran's drone and missile attack last weekend, with concerns that a worsening conflict in the Middle East could disrupt oil supplies.

Brent Crude (BZ=F) jumped as much as 3.5% on the back of the news but is now trading 1% higher at $87.97 after paring back some gains.

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  • London’s benchmark index was 0.3% up by the afternoon as anxiety over the Middle East started to ease

  • Germany's DAX (^GDAXI) dipped 0.5% and the CAC (^FCHI) in Paris was treading water

  • The pan-European STOXX 600 (^STOXX) was down 0.5%

  • Wall Street opened flat with the S&P (^GSPC) down 0.05%, while the Dow Jones industrial average (^DJI) gained 0.2%. The tech-focused Nasdaq (^IXIC) lost 0.3%

  • UK retail sales stalled unexpectedly in March

  • Revenues at gambling firm 888 (888.L) beat forecasts for the past quarter

Mohit Kumar, chief Europe economist at Jefferies, said: "Given that today is a Friday and markets will be jittery over any developments over the weekend, we are likely to see a push towards risk aversion and degrossing as investors try to reduce risk before the weekend.

"Geopolitical premium is here to stay for the near term. We remain still hopeful that the current conflict will not escalate further and the broader impact can be contained."

Follow along for live updates throughout the day:

LIVE COVERAGE IS OVER21 updates
  • Blog close

    Well that's all we have time for folks, thanks for following along today and to those that stayed tuned throughout the week.

    We will be back on Monday to bring you all the latest market news.

    As a reminder this is what to look forward to next week:

    • The first Q1 GDP reading and PCE inflation in the US will be in focus next week, along with global flash PMIs due Tuesday.

    • There will also be figures out for March's personal income and spending data on Friday.

    • In Europe traders will be eyeing up the Ifo survey in Germany on Wednesday as well as consumer confidence indices for Germany, France and the UK throughout the week.

    • Next Friday, the ECB will also release its latest consumer expectations survey results.

    • In Asia, there will the Bank of Japan (BoJ) decision on Friday, along with the Tokyo CPI for April.

    • Notable corporate earnings include Microsoft, Alphabet and Meta.

  • Tesla recalls almost 3,900 cybertrucks

    Tesla (TSLA) has recalled 3,878 Cybertruck pickups to rework or replace accelerator pedals that can dislodge and cause the vehicle to unintentionally accelerate, increasing risk of a crash.

    The company received notice of two customer claims related to the issue, according to a recall report submitted to the US National Highway Traffic Safety Administration.

    It said that when high force is applied to the accelerator, the pedal may dislodge and become trapped by interior trim. Tesla confirmed it will fix the accelerator pedals free of charge.

  • 11 beautiful homes with glorious garden rooms

    Investing in a home with a garden room will enable you to enjoy your outside space without being reliant on the weather.

    Whether part of the main house or a separate structure, this bright and versatile area can be adapted for a variety of uses.

    All these properties for sale come with rooms such as compact cabins, standalone studios and ornate orangeries that bring the outdoors in.

    Check out these 11 beautiful homes with glorious garden rooms

  • Inflation faces two main risks, says Lagarde

    European Central Bank President Christine Lagarde arrives to the International Monetary Fund (IMF) during the World Bank/IMF Spring Meetings in Washington, Thursday, April 18, 2024. (AP Photo/Jose Luis Magana)
    European Central Bank President Christine Lagarde arrives to the International Monetary Fund (IMF) during the World Bank/IMF Spring Meetings in Washington, Thursday, April 18, 2024. (AP Photo/Jose Luis Magana) (Jose Luis Magana, Associated Press)

    Christine Lagarde has warned that inflation faces two main risks — from geopolitical tensions and higher growth as traders look to a first eurozone interest rate cut from the European Central Bank in June.

    The President of the ECB said the risks to the inflation outlook “are two-sided”.

    Speaking at the IMF spring meeting in Washington, she said:

    Upside risks include heightened geopolitical tensions, as well as higher wage growth and more resilient profit margins than anticipated.

    Downside risks include monetary policy dampening demand more than expected, and an unexpected deterioration in the economic environment in the rest of the world.

  • American Express profits jump

    American Express (AmEx) posted a 34% rise in first quarter profits boosted by more customers spending on its cards.

    The New York-based credit card company said it earned $2.4bn (£2bn) in the first three months of the year, or $3.33 a share, up from $1.8bn, a year earlier.

    The results exceeded expectations of roughly $2.95 a share in profits for the quarter.

    Higher cardmember spending on accounts as well as more balances collecting interest was cited for the strong performance.

    The company made $15.8bn in revenue in the quarter, up 11% from a year earlier, while AmEx (AXP) customers spent $419.2bn on their cards in the quarter, up 5% from a year earlier.

  • Best savings accounts that offer above inflation rates

    UK households are on the lookout for every little way to make their money go further amid the cost of living crisis, and savings accounts might help.

    After years of low rates, high-yield savings accounts are having a moment as the Bank of England has kept interest rates at a 16-year high of 5.25%. While homeowners face higher mortgages, there is a silver lining in higher borrowing costs as consumers can now find UK savings accounts that offer more than inflation.

    The UK rate of inflation came in at 3.2% in March, the lowest since September 2021, according to figures from the Office for National Statistics (ONS).

    Savers should make sure they shop around to find the best deals and check what rate they are on – as they could still be sitting on a product that does not beat inflation.

    Read the full article here

  • Cocoa hits new record high

    Luxury handmade Belgian Chocolates are seen displayed at Sandrine a chocolate shop owned by Niaz Mardan, in south west London, Thursday, March 21, 2024. Niaz Mardan, is suffering due to high cocoa prices, she's making no profits and fears she will have to close the shop that's been around for 25 years (she's the third owner and took over in 2019). (AP Photo/Kirsty Wigglesworth)

    The price of cocoa has hit a fresh high with futures in New York up as much as 5% to $11,578 a metric ton.

    It comes after data on Thursday showed so-called grinds (where cocoa is turned into butter and powder used in confectionery) rose nearly 4% in North America during the three months of the year compared to the same period a year ago.

    Meanwhile, processing in Europe fell only about 2% and slipped in Asia despite record prices, which have more than doubled since the start of 2024.

    Cocoa crops in West Africa have been decimated over the last season by poor weather and disease.

  • DS Smith falls as Mondi abandons takeover offer

    Mondi (MNDI.L) has confirmed on Friday that it will not make an offer to buy rival DS Smith (SMDS.L).

    It comes as the British paper and packaging group agreed an all-share deal worth £5.14bn in March, which was later gatecrashed by International Paper who offered £5.8bn.

    Mondi said:

    "Following a period of due diligence, and after carefully considering the value the combination with DS Smith would deliver to Mondi’s shareholders, the Mondi Board has decided that the transaction would not be in the best interests of its shareholders.

    "Accordingly, Mondi does not intend to make an offer for DS Smith."

    Shares in DS Smith dropped 10% on the back of the news as traders abandoned hopes of a bidding war. Mondi’s shares roe 9%.

  • What's coming up next week?

    Well we are half way through our day, so let's take a moment to look at what we can expect next week.

    The first Q1 GDP reading and PCE inflation in the US will be in focus next week, along with global flash PMIs due Tuesday. There will also be figures out for March's personal income and spending data on Friday.

    In Europe traders will be eyeing up the Ifo survey in Germany on Wednesday as well as consumer confidence indices for Germany, France and the UK throughout the week. Next Friday, the ECB will also release its latest consumer expectations survey results.

    In Asia, there will the Bank of Japan (BoJ) decision on Friday, along with the Tokyo CPI for April.

    Notable corporate earnings include Microsoft, Alphabet and Meta.

  • Netflix slumps after disappointing Q2 revenue forecast

    Netflix stock was trending almost 4.8% lower in premarket on Friday after it posted a disappointing second quarter revenue forecast.

    Despite other positive numbers — such as a rise in operating income of 54% and additional 9.3m subscribers globally in the first quarter — management said net additions would slow in Q2 compared with Q1 due to "typical seasonality".

    Meanwhile, operating margin rose by seven percentage points to 28% and management raised its full-year margin guidance to 25%.

    See what other tickers are trending today

  • UK mortgage rates rise

    Money markets are now pricing in slightly less than two interest rate cuts this year. This means that investors aren’t fully convinced that the Bank of England (BoE) will have cut rates to 4.75% by December from their highs of 5.25% today.

    Data firm Moneyfacts said that average mortgages rates are marginally higher this morning:

    • The average 2-year fixed residential mortgage rate today is 5.83%. This is up from an average rate of 5.81% on the previous working day.

    • The average 5-year fixed residential mortgage rate today is 5.40%. This is up from an average rate of 5.39% on the previous working day.

  • S&P cuts Israel's credit rating

    People visit the Mount of Olives overlooking the Dome of the Rock at the Al Aqsa Mosque compound in the Old City of Jerusalem, Friday, April 19, 2024. Tensions have been high since the Saturday assault on Israel amid its war on Hamas in the Gaza Strip and its own strikes targeting Iran in Syria. (AP Photo/Leo Correa)
    People visit the Mount of Olives overlooking the Dome of the Rock at the Al Aqsa Mosque compound in the Old City of Jerusalem, Friday, April 19, 2024. Tensions have been high since the Saturday assault on Israel amid its war on Hamas in the Gaza Strip and its own strikes targeting Iran in Syria. (AP Photo/Leo Correa) (Leo Correa, Associated Press)

    S&P Global lowered Israel’s credit rating last night before reports of explosions in Iran.

    The ratings agency cut Israel’s long-term ratings to A-plus from AA-minus, citing heightened geopolitical risk. It left its outlook on negative.

    It predicted that a wider regional conflict will be avoided, but that the Israel-Hamas war and the confrontation with Hezbollah appear set to continue throughout 2024.

    S&P said:

    “We forecast that Israel’s general government deficit will widen to 8% of GDP in 2024, mostly as a result of increased defense spending”

  • Gas prices fall

    Gas prices have fallen today despite Israel’s attack on Iran last night.

    Dutch front-month futures, Europe’s benchmark contract, rose as much as 4.7% but have pared back gains to now trade 2.3% lower. Prices remain on track for a second weekly advance.

    The UK’s equivalent contract has dropped 2.3% after rising as much as 4.1%.

  • Markets on the back foot

    European markets are selling-off today as the conflict in the Middle East comes amid worse than expected retail sales in Britain.

    Mohit Kumar, chief Europe economist at Jefferies, said:

    "Give that today is a Friday and market will be jittery over any developments over the weekend, we are likely to see a push towards risk aversion and degrossing as investors try to reduce risk before the weekend.

    "Geopolitical premium is here to stay for the near term. We remain still hopeful that the current conflict will not escalate further and the broader impact can be contained."

  • Thames Water to raise bills by 56%

    Thames Water is set to hike bills by 56% over the next five years under its renewed business plan, it has been reported.

    The utility company was plunged into crisis last month when shareholders refused to inject a further £500m into the business. It is currently struggling under the weight of an £18bn debt pile.

    It comes as lenders to the company face losing up to 40% of their money in the event of the troubled supplier being nationalised.

    Details of the government’s contingency plans have laid out the potential impact on creditors in Thames Water, which serves 16 million people.

    The proposal, dubbed “Project Timber”, indicates that some bondholders in Thames could see the value of their loans slashed by between 35% and 40% if Thames fails, as first reported by The Guardian.

  • 888 beats revenue forecasts

    William Hill betting shop, Unit 7, Ranelagh St, Central Station, Liverpool, Merseyside, England, UK,  L1 1JT
    William Hill betting shop, Unit 7, Ranelagh St, Central Station, Liverpool, Merseyside, England, UK, L1 1JT (Tony Smith)

    William Hill owner 888 (888.L) has revealed that revenues for the first quarter of the year were slightly ahead of expectations, coming in at £431m, a rise of 2% on the previous three months.

    It had previously forecast a range of between £420m to £430m.

    The group saw an increase in the number of active customers in the UK but revenues dipped 1% in the country as growth in gaming revenues was more than offset by lower sports revenues, linked to events such as the Cheltenham Festival.

    Per Widerstrom, chief executive of 888, said:

    "I am pleased to report that Q1 2024 revenue was slightly ahead of our guidance, with strong player volumes converting into improved revenue run rates.

    "Having lapped various regulatory and compliance changes during the quarter, and with increased marketing investment supported by an exciting product pipeline, we remain confident in a return to growth from Q2 2024.

    "We are moving decisively and at pace to position our company for long-term success, and I look forward to providing further updates about our progress in the coming months."

  • How much does it cost to run our homes?

    While households may be spending less to try and combat the ongoing high cost of living, the proportion of that spend associated with our homes has increased.

    According to the latest analysis from finance experts RIFT, the cost of owning and running a home has increased by 14% over the last five years — a jump of £863 per year, or 14.1%.

    • The average household spends an estimated £27,498 a year on total expenditure, which includes everything, not just costs associated with their household.

    • While this total spend has reduced by 4.6% over the last five years the proportion of this total spend attributed to our homes has increased, up from 21% five years ago to 25% today.

    • Today the average household spends an estimated £6,994 a year on core household outgoings.

    Which areas of the home are costing us more today?

    • Charges such as council tax and water charges have seen the steepest increase, up by 22.1% in the last five years - adding an additional £343 per year to our household costs.

    • The cost of making alterations and improvements to our homes has also increased considerably, up 17.9% in the last five years, adding £244 per year to our household costs. This is driven by a 27.8% rise in hiring home improvement professionals.

    • The cost of maintaining and repairing our homes has seen the third largest jump, climbing by 14.1% in five years.

    • Mortgage costs are also up 8%, while household insurances have increased by 4.2% - driven by a 300% increase in household appliances insurance.

  • Bitcoin set to undergo halving

    Bitcoin (BTC-USD) is about to undergo a halving, cutting the rewards for miners in half to reduces the pace at which new bitcoins enter the market.

    It occurs approximately every four years to create scarcity and potentially impact the cryptocurrency's price.

    Bitcoin has already surged by over 45% since the beginning of the year, and many analysts believe that the supply crunch caused by the halving, combined with increased demand through spot bitcoin exchange-traded funds (ETFs), could further propel the price even further.

    This week's episode of Yahoo Finance Future Focus delves into the reasons behind the bitcoin halving and examines the potential impact this event will have on the price of the largest digital asset by market capitalisation.

    Read why here: What is bitcoin halving and how will it impact its price?

  • UK retail sales stall in March

    File photo dated 24/12/2016 of a man carrying bags in the Broadmead shopping area of Bristol. Retail sales improved in March, largely driven by an early Easter but providing a boost to firms after a difficult start to the year, figures suggest. Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor. Issue date: Tuesday April 9, 2024.

    UK retail sales stalled unexpectedly last month as shoppers scaled back their spending on food and at department stories.

    The volume of goods sold in stores and online came in unchanged in March after a revised 0.1% gain the month before, the Office for National Statistics said. Economists had expected an 0.3% increase.

    Retail sales grew 1.9% in the first quarter, meaning the sector contributed 0.09 percentage points to gross domestic product (GDP) during the period.

    The economy as a whole is expected to have expanded 0.2%, according to the median of forecasts in a Bloomberg survey.

    Fuel sales provided a lift for the weak figures. Excluding auto fuel, overall sales fell 0.3% in March, erasing a gain of the same size the month before.

    Heather Bovill, senior statistician at the ONS, said:

    "Retail sales registered no growth in March. Hardware stores, furniture shops, petrol stations and clothing stores all reported a rise in sales.

    "However, these gains were offset by falling food sales and in department stores where retailers say higher prices hit trading.

    "Looking at the longer term picture, across the latest three months retail sales increased after a poor Christmas."

  • Asia and US stocks

    Stocks in Asia plunged overnight as tensions in the Middle East weighed on sentiment.

    The Nikkei (^N225) tumbled 2.7% on the day in Japan, its largest drop in more than three years, while the Hang Seng (^HSI) fell 0.9% in Hong Kong. The Shanghai Composite (000001.SS) was 0.3% down by the end of the session.

    It came as oil prices jumped around $3 after Iran fired air defence batteries early on Friday morning following reports of explosions near the city of Isfahan.

    Across the pond, US indices drifted to a mixed finish on Thursday.

    The S&P 500 (^GSPC) fell 0.2% to 5,011.12 after bouncing between small gains and losses throughout the day. It was the fifth consecutive loss and the longest losing streak since October. The index is now sitting 4.6% below its record set late last month.

    The Dow Jones (^DJI) managed to edge up 01% to 37,775.38, while the Nasdaq Composite index (^IXIC) slipped 0.5%, to 15,601.50.

  • Coming up...

    Good morning, and welcome back to our live markets blog. Here we'll be covering what's moving markets and happening across the global economy.

    Here's a quick look at what's on the agenda for today...

    • 12pm: UK GFK consumer confidence

    • 7am: UK retail sales for March

    • 7am: Trading updates: 888 Holdings, Woodside Energy

    • 2pm: IMF/World Bank Spring Meeting continues in Washington DC

    • 3.15pm: Bank of England deputy governor Dave Ramsden on panel about lessons to learn from post-pandemic inflation

Watch: How inflation affects interest rates?

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